LONDON -- Richard Branson's Virgin Rail Group on Monday succeeded in holding up a deal that threatens to strip it of its British rail franchise.

Virgin Rail launched a legal challenge last month after losing the long-term deal with the British government to run the major West Coast Main Line railway from London to Glasgow to rival FirstGroup.

The Department for Transport had earlier said that the legal move was "no reason" to delay the new contract signing — due to take place on Tuesday — but on Monday backtracked and accepted that the competition for the 13-year franchise remains alive.

More than 100,000 people have signed an online petition calling for the decision to take the franchise from Virgin to be reconsidered.

Labour lawmaker Maria Eagle, the shadow transport secretary, said there were concerns over how the new contract would affect fares and levels of service and called on the government to allow parliament time to consider the deal.